Rite Aid aggregates information to spot trends and identify causes of loss

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One constant of technological innovation is its ever-increasing level of sophistication. As successive generations of innovators devote ever more attention to age-old challenges, their efforts result in consistently better mousetraps.

The cumulative effect of year after year of sweat, toil and research results in what Institute for Quality Assurance refers to when it says “Improvement in business strategy, business results, customer, employee and supplier relationships can be subject to continual improvement. Put simply, it means ‘getting better all the time.’”

The challenge is that better solutions are developed concurrently by both legitimate players and illegitimate scammers. In retail security, maintaining consistent levels of effectiveness and reliability require constant vigilance to stay one step ahead of the con artist. This is especially true in highly sensitive quarters — areas handling cash, confidential trade secrets or controlled substances.

Agilence understands this challenge; since 2013 the company’s primary product, 20/20 Data Analytics, has emerged as an industry leader in loss prevention.

In its earliest iteration, the platform operated solely as an exception-based reporting tool, says Derek Rodner, vice president of product strategy and development.

“Originally, the platform took in data from points of sale and other systems capable of enabling clients to build queries, dashboards and other tools to identify losses occurring at the point of sale,” he says.

By sifting through huge quantities of data and identifying the anomalies, attention could be directed to discerning and dealing with the underlying issue.

Unique challenges

Rodner says losses can stem from various sources: operational (often the result of inadequate employee training), systemic (in-stock items that are either missing or mispriced in the POS data files) or fraud — initiated by employees or customers.

In January of 2016 the company released its 2.0 version, which exponentially expanded 20/20’s usefulness. Based on input received from customers, the new edition introduced tools to aggregate data from other areas of operation: human resources, cash office, inventory, etc. By linking together these semi-autonomous modules, users can spot trends and identify the root causes of losses.

“We’re an aggregator of data — we can marry divergent sources together, mash it up and report on it in ways a client may not have thought of,” Rodner says. “This level of integration will enable the user to find relationships and patterns in the data that might not be readily apparent.”

To use the program effectively, Agilence provides a “customer success team” to train new clients to identify and address relevant data trends. While the 2.0 version of 20/20 can enhance the security of any store operation, Agilence developed its capabilities with an eye for use in retail pharmacies.

Government rules for retail pharmacies are numerous and complex, the violation of which can involve very significant fines. A shortage of government inspectors has placed the onus on proprietors and individual pharmacists to maintain the integrity of the process.

In 2016 Rite Aid adopted 20/20 Data Analytics as the security software in its pharmacies. A major player in the retail pharmacy industry, the company operates 4,560 locations in 31 states and the District of Columbia.

Previously Rite Aid used a combination of several systems, including in-house applications involving Microsoft Access using structured query language. Beginning in 2015, various third parties including vendors began using incompatible software, making a comprehensive update necessary.

Because they routinely handle controlled substances, pharmacies present several unique security-related challenges. Pharmacy operation also requires the use of several independent systems: POS, inventory (which must perform ongoing “cycle counts”), adjudication to perform proper billing of insurance providers and “fill” programs to accurately dispense the needed medications.

Company profitability is not the only reason for pharmacy security. Legal and licensing requirements mandate effective and comprehensive back-of-the-house procedures. Government rules for retail pharmacies are numerous and complex, the violation of which can involve very significant fines. A shortage of government inspectors has placed the onus on proprietors and individual pharmacists to maintain the integrity of the process.

Modes of use

Security risks native to pharmacies can arise from a variety of sources.

Diversion, the internal theft of drugs for personal use, is a significant problem. According to the North Carolina Pharmacist Recovery Network, 11-15 percent of U.S. pharmacists suffer from a chemical addiction, and often steal drugs to support their habit. Similar numbers of pharmacy techs engage in theft, often to sell to friends or addicts.

Another internal issue is financial shrink — losses due to poor bookkeeping, improper ordering and other paperwork errors.

A final concern is external in nature: Patients involved in doctor shopping and “pill-pushing” physicians. Government regulations require a pharmacy to decline suspicious prescriptions, particularly for Schedule 2 drugs including opiates such as hydrocodone and oxycodone.

Because it works primarily as an information aggregator, 20/20 can draw in salient data and present it in a way that is intelligible and useful. Users of the system can interact with it in a passive or active mode.

Passive use involves configuring the system to send the principal an email or text notification if an aberration occurs. For example, if an inordinate number of prescriptions from the same prescriber occurs in a short amount of time, a “red flag” would go out to alert management. Passive use is typically employed by district supervisors or senior company officials.

Active users log into the system at least daily to observe trends in the data by examining various dashboards and reports. This is where 20/20’s ability to interlink divergent data sets really pays off.

In this mode, the program is capable of viewing data in isolation. “With active use, I can look up one script, from there I can bounce off to the patient, to the prescriber, to the drug to look at each inventory event,” Rodner says. “I can look at the store and its patterns and history and so on.”

One-click capabilities

All data can be viewed in the aggregate and examined from numerous angles. “The data can be sliced and diced in a myriad of ways — by types of customers, by a given group of stores, by a particular group of drugs and the like,” Rodner says.

The information can also be archived, since government regulations require the data to be retained for seven years.

“20/20 was able to quickly identify potential losses due to diversion, plus procedural and operation errors. By having all necessary data in one application with drill-down capability, field investigators who are not analysts now have such capabilities at the click of a button.”
— Brandan Mehaffie, Rite Aid

Careful study and analysis of this data can yield valuable insights, and if suspicions are aroused, signal senior management to launch a formal examination. Deployment of 20/20 at Rite Aid is in its infancy, but early results demonstrate its versatility and effectiveness.

“We are just now releasing the solution to our field leaders, but test runs during late-stage development are very encouraging as 20/20 was able to quickly identify potential losses due to diversion, plus procedural and operation errors,” says Brandan Mehaffie, Rite Aid’s director of pharmacy asset protection.

“By having all necessary data in one application with drill-down capability, field investigators who are not analysts now have such capabilities at the click of a button.”

Going forward, Rodner sees his product development group further enhancing 20/20’s capabilities.

“In the future, we hope to introduce predictive analytics, machine learning and artificial intelligence … [they]are all areas that we are working on,” he says. “Right now, we’re looking for things we know exist, but there are other patterns in the data that no one has yet even thought about.”

Detroit-based Paul Vachon writes for various trade publications, in addition to feature stories for consumer magazines and books on Michigan history and travel.

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